Microsoft Corp. (MSFT), as has often been the case recently, is arriving a bit late to the party. But according toThe Verge, CEO Steve Ballmer has big plans to penetrate this growing market, and in the process add a new member to the Xbox brand.

Like Google's Nexus brand, Microsoft offers a 10-inch tablet, and is rumored to be cooking up a 4-inch Surface smartphone up. That leaves one gaping hole in the lineup.

Microsoft's looks to fill that void with a high-end gaming device that supports current Xbox peripherals, sports a custom ARM processor, and uses high-bandwidth RAM. The device will run a custom Windows kernel.

A working title for the tablet is "Xbox Surface".

Microsoft is reportedly planning to make a "baby" Surface tablet.

Of course it isn't unthinkable to that Microsoft could abort the fledgling tablet. After all, that's what it did after conceiving and incubating the Courier concept for months. It would take Microsoft two years after the death of Courier to finally pop its first first-party tablet hardware out.

The new device may join the upcoming "Xbox 720". But unlike the Xbox 720, which will likely be built by traditional Chinese third-party mass-manufacturers, the Xbox Surface may be built at the same secret facility as the original Surface. Microsoft has not disclosed the location of that lower-volume facility, but some rumors suggest that Microsoft built its own small factory in China to keep a tighter grip on the production process.

If you feel like only selling to 80% of the available market. Keep in mind that 1 in 5 Americans lives in a rural area, frequently without access to broadband internet.

Physical media for all purposes will be very important, at the very least until that 20% of Americans are served with reliable broadband connections. And granted the relative enormity of that task...I wouldn't hold your breath waiting for it.

Sure, I could maybe see some people buying something like that and then just driving to Starbucks or whatever when they want to download a new game. But I can't imagine that the vast majority of people would be interested in doing that.

The vast majority of cellular wifi and satellite plans in the US tap out at about 10Gb. Just to address what people who can't get either DSL or cable actually might be able to get.

Then look at the size of some modern video games...Age of Conan, if you want a full install, is over 20Gb by my reckoning. Star Trek Online is, I believe, around 5Gb or so. Others are all comparable...DC Universe, LOTRO, DDO, so on and so forth.

Say you want to be a gamer on a budget...and all of the games listed above can be played for free. But does it sound like a good idea to spend 2 months' worth of you allowed bandwidth to download one game? Does it even sound feasible?

Now start thinking about Steam. Or Netflix. Or...anything that involves streaming and/or large downloads.

On demand burning has been done before and I can see it easily expanding. Buy a key, add a couple of bucks for a DVD/Blu-ray, that segment of the market is served and you saved producing and shipping around tons of boxes.